Good morning, and welcome to Dex Media’s Second Quarter 2014 Conference Call. With me today are Peter McDonald, Chief Executive Officer; and Dee Jones, Chief Financial Officer. Some statements made by the company today during this call are forward-looking statements. These statements include the company’s beliefs and expectations as to future events and trends affecting the company’s business and are subject to risks and uncertainties. The company advises you not to place undue reliance on these forward-looking statements and to consider them in light of the risk factors set forth in reports filed by Dex Media and its predecessor companies with the Securities and Exchange Commission. The company has no obligation to update any forward-looking statement. A replay of the teleconference will be available at 800-585-8367. International callers can access the replay by calling 404-537-3406. The replay passcode is 78702537. The replay will be available through September 5, 2014. In addition, a webcast will be available on Dex Media’s website in the Investor Relations section at www.irdexmedia.com. At the end of the company’s prepared remarks, there will be a question-and-answer session. And now, I’d like to turn the call over to Peter McDonald, CEO. Peter?

Thank you, Laurie, and good morning everyone. We appreciate you joining us on the call. Today I will give an overview of our progress for the first half of the year and then Dee will provide a deeper dive into the financials for the second quarter. As we continue transforming this business into a one-stop shop for local marketing services, we are pleased to report continuing progress in the second quarter. While 2013 was all about the merger and integration, this year is marked by momentum and execution. Over the past two quarters, we have been improving trends in digital ad sales, increasing client interest in our products as well as expanded collaboration among sales, marketing and operations teams. During the quarter we advanced our effort to be the preferred marketing [local] to businesses across the country. Once again the highlight is digital ad sales of 11.2% year-to-date and 12.4% for the second quarter, driven primarily by our bundled solutions. That is an improvement of 170 basis points year-to-date and 620 basis points as compared to the second quarter of 2013. Year-to-date pro forma EBITDA was 368 million, with a margin of 38.3%. Free cash flow was $193 million year-to-date and we’ve retired $210 million in bank debt for the first half of 2014. I’m pleased to report that at the end of the second quarter our client retention is approximately 80% and that percentage is even better with our higher spending multi-product clients. In addition, recurring revenues were approximately 80% to 85% and bad debt continues to hold around 2%. We believe these numbers indicate our clients’ continued satisfaction with the value delivered by our marketing solutions. In the second quarter, digital sales accounted 29% of amortized revenue, up from 24% in the second quarter of 2013. Currently 36%…

Thank you, Peter, and good morning, everyone. Before I provide the second quarter financial results, I want to remind you that some of the results I will be speaking to this morning are non-GAAP numbers. We have provided a reconciliation of GAAP to non-GAAP results in the appendix of this presentation. The second quarter was about continued progress in digital performance with our bundled solutions. In addition, we focused on realigning the sales organization, sales productivity and cost management across all functions, allowing us to continue to lower costs. We also completed a debt repurchase in June 2014, reflecting our focus on efficient utilization of cash. As we continue to evolve our marketing solutions, we’ll remain focused on also gaining efficiencies in the business. As Peter mentioned earlier, this quarter was about gaining momentum in the execution of our digital strategy. For the second quarter of 2014, digital ad sales grew 12.4%. Total multiproduct ad sales declined 12.5% as compared to a decline of 16.2% for the same period last year. The digital ad sales growth was driven primarily by the performance of our bundle solutions. We’re pleased with our progress in the conversion of existing current print clients to our multiproduct bundles and in our ability to effectively maintain steady 80% client retention and stable client renewable dollars. Regarding the digital ad sales trend in the presentation, I want to mention the sales reporting methodology change as result of ongoing merger integration activities which led to a small restatement in digital ad sales from 8.5% to 9.6% for the first quarter. Now, turning to revenue and EBITDA results for the second quarter. Dex Media reported revenue of $474 million, a 15.1% decline compared to the pro forma results last year. Adjusted expenses were $300 million, and Adjusted EBITDA was…

(Operator Instructions) Your first question comes from the line of Mark Hetrick of Wells Fargo.

Hey, guys great quarter. I really thought your digital growth for the quarter was really impressive and recently it seemed like you all seemed to struggle a little bit in the local market with the digital growth. How do you feel that Dex seems to differentiate themselves versus other competitors?

I think -- Mark, this is Peter. I think as we said in our prepared remarks I think that this one stop shop approach to local businesses is a winner. And local businesses don’t want to see somebody from each of the different variable digital companies out there with one solution. And so bringing our strategy that has all of it aggregated together seems to give us an advantage and our clients -- local businesses want to just see one person a month versus many different vendors out there trying to sell whatever their product might be.

And Mark, I’d also suggest to you with feet on the street, 2,000 sales professionals and relationships established with over 500,000 clients and businesses out there, I think we’ve got a base of business to operate firm and transform into the digital space.

Your next question comes from the line of Chad Quinn of [inaudible].

Good morning. It looked like the average value per order was trending up a little bit. Is that a function of broad based price increases that are pricing or is that more a function of you sold more bundles at a more attractive price point?

Good morning. It looked like the average value per order was trending up a little bit. Is that a function of broad based price increases that are pricing or is that more a function of you sold more bundles at a more attractive price point?

Chad, I would suggest it’s probably more the function of selling bigger programs and larger programs in the bundle solution that we are putting forward as opposed to straight up pricing on individual items. We’re always evaluating price opportunities, but I will say in this marketplace we are more focused on moving the clients up the chain as far as what they are buying and getting them now into bigger programs that will provide a better value. And the bundle strategy that we are using is right in line with that.

Okay. And Peter you mentioned the partnerships. Can you merely talk about this point with your product offering what you see as being the ideal partnership to sort of enhance your product offering? Obviously not naming maybe the target but what they would offer and how that would help enhance the portfolio of Dex’s assets?

Okay. And Peter you mentioned the partnerships. Can you merely talk about this point with your product offering what you see as being the ideal partnership to sort of enhance your product offering? Obviously not naming maybe the target but what they would offer and how that would help enhance the portfolio of Dex’s assets?

Chad, I think the way to think about this is there’s – we’ve looked at probably 50 or so companies out there. We’ve prioritized in this. We think of the opportunity, where there could be synergies and opportunities on some of the products that are out there and some of the coverage that they have with their clients. And as we continue to look at them, and I think you could think about this, we are talking to everyone in a space looking for opportunities and partnerships. And I wish I could tell you more at this time, but right now we have nothing to report. But you could say that everything out there is fair game the way we are looking at it.

Your next question comes from the line of Colin Wilson-Murphy of Bowery Management.

Thank you for taking my question. First are you currently rolling out any out of market trials for your digital products, and if so, how are those trials going?

No, we are not and we’ve tried this in the past and we had limited success and given where we are we’ve stopped this. We have a tremendous base of over 0.5 million clients. Many of them are still in need of our digital solutions and that’s where the focus is today. And then once we do that, there’s plenty of clients in our market places that are familiar with our brands which will be our next focus.

Okay, and if an SMB customer receive one invoice where print and digital services are not broken out to the client, how do you internally allocate that revenue between print and digital for financial reporting purposes?

The print and digital attribution is based on the market price of individual standalone products. GAAP essentially requires that you attribute that revenue on the basis of how your standalone products in the marketplace are priced. And we have plenty of a la carte pricing of individual products across that in order to establish the relationship there. So it's a pretty clean methodology to attribute revenue between the two. And basically to the degree you’re given any discounts across a bundle, you proportionately assign that discount to the respective product sets on that basis in the sales function and in the numbers that we report from an ad sales perspective. That’s essentially the basic attribution methodology. There’s few exceptions based upon the makeup of the individual products. But as a broad answer, it's essentially proportionately attributed based on a la carte pricing in the respective market.

Okay. And your bank debt matures in just over two years in December of 2016. What is your plan for addressing your balance sheet?

As we move towards the end of 2016, there’s a good bit of runway and activity between now and then for performance of the business to continue to improve and evolve. That’s where the focus is right now is driving the performance of the business, maintaining efficiency and utilizing cash in an efficient manner between now and then. Exactly how that plays out will be a function of a lot of variables, including how the business is moving and what the prospects are for the business at that point in time, and how the capital markets view things. But we’ll continuously look at that and access the various alternatives that may be available. I will tell you we’re still focused on the interim period at this point and driving performance and efficient utilization of cash.

Your next question comes from the line of Jen Ganzi of Hillmark Capital. Jen Ganzi – Hillmark Capital: Thanks so much for taking the question. Just curious, it seems like your print decline was a little bit faster than last quarter. Is that attributed to – because the digital is obviously also much better than last quarter? Is that because like more folks are switching into digital? Can you talk a little bit about that?

Yeah. If you look at the sequential quarter performance on the published revenue report, you did see a little bit of an uptick in the declines on print. That’s a function of several things. Mix of markets there within the quarter, the driving of bundled solutions across the footprint, and what markets you are in with respect to those types of activities. I can’t sit here and tell you there’s one single factor that drove that change in the digital decline. I think we’re in the high 19s versus 21% to 21.5% in this quarter. We’re working at all times to mitigate those print declines at the same time is trying to drive and transform the digital business. We do believe that the bundled solutions will over time help the print aspect of things in the performance of that because from what we’ve seen, the bundled multi-product solution which in a lot of cases does include a print component, allows for a better retention and a better value proposition to the client. And as we move forward, we’ll continue to press in that regard. But I can’t sit here and say that there’s one single factor driving the print decline. Jen Ganzi – Hillmark Capital: Okay, got it. Thanks. So would you think that if next quarter had a similar kind of strong digital result you’d also potentially see a quicker north of 20% print decline?

As you know, we don’t provide guidance. Just suffice it to say look, we’ll continue to focus on all aspects of that sales number and the sales line. We’ll ultimately get to multi-product improvement which would be inclusive of both elements of that. Jen Ganzi – Hillmark Capital: Okay. That’s helpful. Thanks. And then I was wondering for your – on the digital side, are you seeing – I guess maybe you could talk a little about your win rates, again more digital only companies or more local guys. Like how do you guys – just on a broader basis, how do you guys stack up when you’re trying to sell your digital solutions? Like do you --just having the print property help and give you guys a much better win rate than your competitors? Maybe just talk a little bit about the competitive environment there?

Yeah, Jen. When we go out to see clients, actually I think that they’re pleased to see us because if you could picture yourself as a small business owner trying to run your business and you’ve got -- and I think it’s an area of around 30 different people calling you a month trying to sell you a different product in digital, it gets pretty frustrating. So, when we come in offering that one solution, we think that’s what’s really giving us an advantage and to be able to get them, take care of their website and management reputation, get them on Google Places, to do all the different things we do is refreshing for them. And I think that’s why we’re having the retention rate of 80%, why we’re having recurring revenues in 80% to 85% rate is because they see value in the complete program. And all the research says local businesses want to have one person come in and give them a one stop solution and that’s what we’re doing and we think that’s why we’re effective. Jen Ganzi – Hillmark Capital: That’s helpful, thanks. Have you seen any abilities to sort of win new clients for the new SMBs that get like either digital only or a bundle that you weren’t previously involved with the Dex?

Right now because of the size of our client base and the opportunity we think that -- we look for the biggest opportunity and the biggest opportunity is to continue to penetrate the existing client base and move them from a single product buy, to a multi-product buy, which includes our digital solutions. And once we feel that we’ve covered that, we will be opportunistic in looking at the local small businesses for the next more of the verticals I think that you’ll see us going to try and drive new opportunities and new clients.

Peter mentioned the Start Smart bundle a little earlier in the call. We have seen success with new business with respect to that as an entry level product. I think you’ll see us continue to focus on driving those types of solutions to bring in new clients and gain further success there. We need to continue to further scale that and drive better results in that regard. But we do believe we’ve got solutions that will work and will continue to work and allow us to grow the relationship with those clients after we do get them in the door. So, absolutely a focus for us in moving forward. Jen Ganzi – Hillmark Capital: Okay, that is helpful. Thanks. And just lastly to your existing client base I guess, other than I guess you say return revenues around 80%, 85%. I guess for print-only guys that are upselling to digital, is there a way to sort of get a sense of what your win rate is for those particular businesses versus any competitors that may also approach them?

I think we’re working with our existing base of clients. That retention rate and that factor, I think our win rate would -- it would imply to me that our win rate relative to competition is pretty strong with that sort of a retention factor, especially knowing the client base that you’re dealing with. When you can hold 80% of your client base you know that they’re -- and especially with limited budgets and a certain view from a small and medium business as to what they’re going to spend on advertising, I would venture to say that we’re pretty strong, against the competition in that regard. Small and medium businesses are going to test and try things, but I think what we’ve found is that especially when they’re dealing with single product solutions from other providers that we have a good success rate and continuing to hold on to those clients.

Your next question comes from the line of Bill Sutherland of Emerging Growth Equities. Bill Sutherland – Emerging Growth Equities : Thank you for taking the question. Good morning. I wanted to ask just a couple of things from the sales course. Maybe this was mentioned and I missed it, but the sales force, the head count as it stands in the quarter and if there’s a change from the year end and any commentary on churn? Thank you.

We mentioned in the call that we’ve got about 2000 sales professionals. That’s inclusive of actual media consultants as well as the sales management and training, and some of the other support functions that go with that. We have found efficiencies within the sales organization over the course of the year, as we’ve adjusted our sales approach and realigned channels to march up with the product set and the demands of the business in trying to find efficiencies. We’ve had good success with our telephone channel and getting that performance and results and that does allow us for a little more efficiency and allow us to shift some of the resources between the premise organization and the telephone organization, allowing us to get some headcount reduction. Best practices as a result of the integration of the two respective enterprises has allowed us to find some additional efficiencies. And the -- as you would imagine the overhead aspect of that sales headcount is seeing some gains and synergies as a result of integration. Bill Sutherland – Emerging Growth Equities : So Dee, I guess you are saying that for the quota bearing numbers are down a little bit and you are just getting more productivity per rep?

Yeah. What you are seeing is that we have seen some efficiencies and we are right sizing the sales force against the approach and the margin and right sizing against our basic clients. Yeah, we’ve seen a reduction in the several hundred range over the course of the last six months to a year in gaining efficiencies there. It’s not just a function of productivity within it. It’s also a function of getting better training, folks getting more comfortable with the solutions and more productivity from the respective sales channels and the mix of sales channels that we are utilizing. Bill Sutherland – Emerging Growth Equities : Okay, I have one other one. Obviously mobile usage is just going off the charts. And I’m curious to what degree your bundles are starting to include mobile capabilities like digital presence, loyalty, opt-in text marketing, that kind of thing? Thanks.

Yeah, and several of our bundles do include a lot of the components that you made mention of. When you look -- if you look at the appendix in the construct of the bundles you’ll see text marketing in there as an example. You’ll see mobile websites as an example. So, we recognize the importance of mobile as a part of the complete package. Identifying the proper channels and the proper place and the proper source for the mobile traffic and the mobile activity that’s going to convert to a transaction for your advertiser is what I believe to be the critical element as we look forward. And sourcing that activity from a consumer perspective, sourcing the right activity from those consumers, that’s going to translate into a lead or a transaction for your client, is going to continue to be more and more important in the mobile space. And as we look at our network and our set of partners and the solutions that we provide, spend at the forefront of that is going to continue to be more and more important. Bill Sutherland – Emerging Growth Equities : So those capabilities are in flex bundles if they are requested?

Yeah. You can get mobile solutions that include a mobile website. You can get text marketing. The other components are search activity and the activity that comes from a consumer behavior. We can get our clients and do get our clients in front of those consumers when they are searching on a tablet or they are searching on their iPhone and we’ll continue to drive in that direction as we move forward.

And in our search products, we also have the capabilities and we have relationships with mobile partners for traffic distribution deals. The local business is really buying a presence or a way to get found on the internet which is both desktop or mobile devices. And we’ve got our app and that aspect in the mobile space as well and it provides a good measure of leads and revenue to us as a result of those leads coming across that. And then you have to look broader than that at all the various traffic sources where we aim to get our advertisers content.

Your next question comes from the line of Seth Crystall of RW Pressprich.

Good morning and thanks for taking my call. I had a few questions. The digital relationships have grown from 34% to 36%. Is that actually the percentage of your current customers that now have at least some digital component to sales?

Yes, that’s what that number represents is the proportion of clients that we have a digital relationship with out of our total base.

Got it. Because I’m just looking and listening to you, you are focusing now on really moving your current customers to digital, not really maybe pursuing new customers so much. I’m just a little surprised in a year it’s only gone from 34% to 36% if that’s where the focus has been. Can you maybe provide a little color on why that is and where you think that number should be going to?

When you look in the space you see a wide range of folks as far as what their -- what proportion they are at. I think the importance to that number is the reflection of the magnitude of the digital presence that we do have in the marketplace. When you think of our base of over half a million clients and that 36% and moving in the right direction in that regard, I think it demonstrates the magnitude of our presence in the marketplace with digital solutions. We believe that as we move forward and our pitch to our client base is that we believe that all of them should have – ultimately have a digital presence. I don’t know that you’d ever get to 100%, but we believe the multi-product, multi-platform solution in today’s day and age is the best solution for the clients. So we’re going to continue to drive and transform that. You’ve also got to remember that in – we do have some headwinds in the print space and we’re working to overcome that and mitigate that, and that has an influence on the overall performance and movement of that number. I think we’ve made good progress in the amount of revenue that’s coming from multi-platform solutions and in the number of clients that have come from – that are moving into a multi-platform solution and we’ll continue to drive that. Can we get better at it? Absolutely. And that’s what we’re looking to do every day.

Seth, let me just add that the – when we look at this internally, there’s a lot of different ways. And when we look at our larger clients, the top 10% or 20% or the top 30% of those clients, the penetrations are much higher. But again as Dee said, with our base of over 500,000 clients, a lot of those smaller clients are the ones that are opportunities as we see it going forward. And with the Start Smart bundles, we’re really making a difference there.

Okay. Great. On the expense side, I know in dollar terms expenses have come down and I guess that’s good detail to keep that moving in the right direction. On a percentage basis though, your expenses are higher as a percentage of revenue. So I might just guess that that’s going to continue to be a focus of the company to keep knocking that percentage down even though the dollars have come down.

When you look at that, you look at – you see 14.8% decline in expense versus last year versus the same period. You see 15.5% or so decline in amortized revenue. That tells you that we’ve come pretty close to holding those margins and holding those relationships. And that was one of the benefits that we hailed out when we talked about the merger and the combination was that we were going allow us to take further steps getting at efficiencies and driving expenses out of the business. However, we’ve also talked about the fact that as this business transforms from print center again to a more multi-platform solution, that we’ll see some margin contractions as we move across the next period in the next few years. We do expect to see a little bit of margin contraction, but at the same time, we’re continuing to look at efficiencies across all the business. I think thus far as this year and over the course of the last couple of years, we’ve done a pretty good job of trying to hold margin in the face of the revenue declines that we’ve experienced. And I think the year-to-date results and the $100 million of expense that’s come out thus far this year, I think it shows a good effort with respect to that.

I agree. I think you’ve done a pretty good job, surprisingly better than I thought originally. I just wanted to make sure there’s still focus in that area. Last question, just on the bank and I know it was brought up. I appreciate you really driving the performance and utilizing cash effectively and efficiently because that’s I think the best way to manage this business. But could you let us know if you’ve had potential discussions with anybody in terms of refinancing bank that I know in past calls you’ve said that ideally having a global bank facility instead of tranches would be ideal. It’s just a question of trying to manage that. I'm assuming that will take quite a while to put together, but have you had any kind of discussions along those lines that you could share with us?

We’ll continue to evaluate alternatives with respect to the capital structure as we move forward. We’re in mid ‘14, 2014. We’ve got a good period of runway here between now and then. We’re a year and a little more, 15 months removed from the integration and the merger and we’re still driving the benefits of that integration and that activity that we work with our lenders to get effected. And I think we’ve got to continue to show performance improvement relative to that. And over the course of the next year to two years, we’ll continue to evaluate and see where the marketplace goes. We’re always having conversation internally about capital structure and how to use cash, and how to improve that relative capital structure position. And we’ll see as we move forward.

(Operator Instructions) Your next question comes from the line of Sam Sekine of ALJ Capital Sam Sekine – ALJ Capital : Just a couple of questions following up of one of the digital relationships. So if you have 36% of your customers with relationships, of the 64 that are not, do you have a sense of how many are signed up with other digital marketers versus how many are just not using digital products at all?

I don’t think I have – we have the market intelligence to that degree. What I would suggest is that the bulk of those are probably in the lower end clients of our base as far as the monthly spend. And I would say that as we work that channel and we work that group, we do find that a lot of them don’t have a digital solution of any substance and we see that as a good opportunity. With the lower spend clients I think there’s a lot of education process that has to take place with that base and I would suggest to you that that’s probably the biggest hurdle is more about educating them as to the value of a multiplatform solution in order to capture that wallet share. I don’t believe it to be a competitive element that’s got them not buying a digital solution. I think it’s more of an educational process and a demonstration of the capabilities and what those solutions can do for their business. Sam Sekine – ALJ Capital : And then on that note just the average value per order. Can you maybe speak on the difference between those. If the 2,700 is the average, what does it look like if it’s print only versus a bundle?

The print only versus the bundle, it just depends on the client. We’ve always seen this business and it’s been fairly consistent in the 300 monthly range as a spend for clients. And I think we are seeing a little bit of contraction in the spend and the average spend for the print client base. As the digital solutions in the AVO and that space have moved up, I think we’ve seen a slight decline in the print AVO. But it’s still a meaningful spend for a small and medium business when you look at the average value per order. But there is a wide range. We talk about averages in that 2,700, 2,800,. We talk of overall averages of 300 monthly or 3, 600. But there is a wide range anywhere from $50 a month up to several thousand or more than that for some of these clients depending upon the solution. There’s a wide range of responses there, but they are still good value in the print and I think there’s advertisers that truly recognize that and they are willing to make the monthly commitment and the monthly spend to get at those leads. But we do think that also represents an opportunity to move them into even better solutions with a multiproduct solution and capture that wallet share that they do want to spend. Small and medium businesses are going to continue to spend advertising dollars. We’ve got to get the solutions in front of them to continue to capture that wallet share. Sam Sekine – ALJ Capital : Got it. And just a final one for me, can you maybe speak on like the territory overlap, maybe like what percentage do you guys overlap with like a YP or Hibu?

With YP, I don’t know the exact proportion, but there’s probably 10%, 15% of our market. It’s relatively small and most of that is simply more contiguous type property than it is direct overlap with YP. With Hibu or Yellowbook, there’s more overlap with Yellowbook in the respective marketplaces with them having been -- the history and the legacy of those enterprises, them being an independent across more of our market. So there’s more market overlap with Hibu than there is with YP. Sam Sekine – ALJ Capital : So with YP then do you foresee maybe some time down the road maybe another merger?

We’re always looking at opportunities in the industry and even broader than that within this advertising space and the digital space. And we’ll continue to evaluate those. We’ve advocated publically that we believe consolidation in the industry can provide some benefits. We haven’t changed that perspective.

At this time, there are no further questions. We thank you for participating in Dex Media’s second quarter 2014 earnings conference call. You may now disconnect.